Launching new business overseas can be a day at the beach

The term “public-private partnership” may be out of favour in government circles, but the New Zealand Trade and Enterprise (NZTE) beachheads programme is proving that it can work — and work well.

The beachhead programme helps New Zealand companies establish bases of operation in offshore markets and to accelerate growth by connecting the companies to networks and services in that particular market.

The first annual Beachheads Week, taking place in Auckland next week, will include workshops, seminars, panel discussions, mentoring and networking events, says Maurice Stilwell, sector manager ICT/Beachheads at NZTE.

The programme has advisory boards in New Zealand, the US and the UK that provide mentoring, support and access to high-level networks in those markets, says Stilwell. He stresses that the programme is a private sector and public sector collaboration.

“The advisory boards let the companies understand some of the cultural aspects of doing business in those countries, the regulatory environment and the protocols,” says Stilwell. “Within months we can help build networks and credibility that would otherwise take years to develop.”

In Tokyo, Dubai and Singapore, where leasing premises is difficult and costly, the beachhead project offers office space where companies can stay for up to two years.

“We have found that when companies establish a physical presence, and locate executives and senior people in a market, they tend to be successful,” Stilwell says. “When companies try to manage a market remotely, they tend to be spectacularly unsuccessful.”

The Tokyo office can accommodate nine companies, the Dubai office eight and the Singapore office is flexible in the number of people it can accomodate. The offices have common facilities, such as boardrooms and “hot-desks” for visitors. The Dubai and Tokyo offices are nearly fully subscribed just months after opening, according to NZTE.

“In the UK, the US and wider Asia we have a distributed model where the companies set up offices where it is most relevant to them, and we still provide the services and a little bit of rental support,” says Stilwell.

Every Beachheads business centre has its own local project manager who helps the companies get started.

In the UK, NZTE’s formal relationship with UK Trade & Investment gives Kiwi companies entering the market the advantage of being treated as UK companies.

“In addition to the services support from NZTE, New Zealand companies can also get the kind of support a UK company would get, such as council rebates or reduction of labour costs,” says Stilwell.

At the moment 70 companies are participating in the beachheads programme — 12 months ago there were only 25. Stilwell says the significant increase is due to improvements in NZTE’s model.

The approach taken in Tokyo and Dubai, and enhancements such as the partnership with UK Trade & Investment, are offering an effective model to New Zealand companies, he says.

Stilwell anticipates that NZTE will accept another 30-40 companies into the programme in the next calendar year.

Applicants who get accepted must have the means and the endurance to support their business in the worst-case scenario, says Stilwell.

Participating companies are being surveyed continuously, and NZTE sees compound annual growth rates of more than 50% in market revenues, according to Stilwell.

In some cases the programme extends to companies that already have offices offshore but want to revise their business plan and change their performance overseas, says Stilwell.

Fisher & Paykel Healthcare, Mercer Healthcare, Intuito (a maker of medical devices) and Argent Networks are among the programme participants who have established themselves in Dubai.

“New Zealand is seen as a neutral, Western country in the Middle East,” says Stilwell. “The minister went on a trade mission into the region in 2004, which added a lot of credibility to New Zealand businesses, and now we are seeing the first wave of New Zealand companies entering that market and being very successful.”

“We are learning from those companies’ experiences and can share that knowledge with other companies entering the same market.”

Two other successful beachheads participants are Endace, a provider of network security and analysis applications, and software company Flintfox.

Endace was accepted into the UK programme and has a strong presence in the UK market today, according to NZTE. The company has offices in New Zealand, the US, Europe, Australia and Asia, and customers in 16 countries.

Flintfox already had customers in the US when it was accepted into the US beachheads programme. NZTE’s advice on tax, accounting and finances was very beneficial, says the company.

This is the first beachheads week when all the boards — US, UK and New Zealand — come together. One of the aims of the convention is to discuss and evaluate the programme to make sure that it meets the needs of New Zealand businesses, says Stilwell.

The programme was established in 2002, mainly to meet the needs of ICT companies. The programme has expanded to include sectors such as marine, biotech, food and beverages.

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